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Audit - 1985 CITY OF SALINA Sa lina, Kansas FINANCIAL STATEMENTS AND AUDITORS' REPORT December 31, 1985 KENNEDY AND COE Certified Public Accountants Sa 1 ina, Kansas /.1 / I£. ~) C{'l/',.," { ( Ú-, l. ,~ ./ / " \ ~L ." " ",n. (; r~CI-L'~ è' / "7' ì Exhibit A Exhibit B Schedule 1 Schedule 2 Schedule 3 Schedule 4 Schedule 5 Exhibit A Exhibit B Exhibit C Exhibit D CITY OF SALINA Sa 1 ina, Kansas CONTENTS AUDITORS' REPORT ON FINANCIAL STATEMENTS AUDITORS' REPORT ON INTERNAL CONTROLS AUDITORS' REPORT ON COMPLIANCE FINANCIAL STATEMENTS SUMMARY STATEMENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND COMPARISON OF CASH BALANCES WITH ENCUM-- BRANCES STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET NOTES TO FINANCIAL STATEMENTS Supplemental Information Schedule of Indebtedness Composition of Ending Cash Balances Comparison of Gross Cash Balances with Depository Security Comparison of Special Assessments Projects Expenditures to Authorizations Schedule of Active Federal Awards AUDITORS' FINDINGS SCHEDULE OF AUDITORS' FINDINGS SEPARATE FINANCIAL STATEMENTS - WATER AND SEWERAGE DEPARTMENT AUDITORS' REPORT BALANCE SHEETS STATEMENTS OF INCOME STATEMENTS OF CONTRIBUTED CAPITAL AND RETAINED EARNINGS STATEMENTS OF CHANGES IN FINANCIAL POSITION NOTES TO FINANCIAL STATEMENTS Page 1 2-4 5 6-7 8-24 25-28 29-30 31 32 33 34 35-36 37 38 39 40 41-42 43-44 Contents MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO HOME OFFICE; p,O, BOX 1100 SALINA, KANSAS 67402-1100 913-825-1561 AUDITORS' REPORT ON FINANCIAL STATEMENTS To the Mayor and The Board of City Commissioners: We have examined the financial statements of the City of Salina, Kansas for the year ended December 31, 1985, included herein on pages 6 to 28. Our examination included all funds and account groups except (1) Sa line County-City Building Authority, Sa lina-Sa line County Board of Health, and Salina Public Library, which we examine and report on separately. (2) Firemen's Relief Association, Salina Recreation Commission, Arts Commission, Salina Housing Authority, and the Salina Authority, which are examined by other auditors who issue separate reports. Our examination was made in accordance with generally accepted auditing standards and the Minimum Standard Audit Program approved by the State Municipal Accounting Board and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. Sa 1 ina Airport their The City of Salina maintains its accounting records and prepares its financial statements on the cash basis, modified by recording encumbrances. As discussed in Note 1, this basis of accounting and presentation differs in some respects from generally accepted accounting principles. Accordingly, the accompanying financial statements are not intended to present financial position and results of operations in conformity with generally accepted accounting principles. In our opinion, the accompanying financial statements present fairly the cash and unencumbered cash balances of the City of Salina, Kansas at December 31, 1985, and its receipts and expenditures for the year then ended in accordance with the method of accounting described in the preceding paragraph, which method has been applied in a manner consistent with that of the preceding year. The accompanying supplemental information presented on pages 29 to 34 is not necessary for a fair presentation of the financial statements, but is presented as additional analytical data. This information has been subjected to the tests and other auditing procedures applied in the examination of the financial statements mentioned above and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. Respectfully submitted, Sa 1 ina, Kansas June 23, 1986 /~~ (!ø- ~ ~ C.P.A. Certified Public Accountant in charge of and actively engaged on this audit. -1- MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO HOME OFFICE: P,O. BOX 1100 SALINA, KANSAS 67402-1100 913-825-1561 AUDITORS' REPORT ON INTERNAL CONTROLS To the Mayor and The Board of City Commissioners: We have examined the financial statements of the City of Salina, Kansas, for the year ended December 31, 1985, and have included our report thereon on page 1. As part of our examination, we made a study and evaluation of the internal con- trol systems, including applicable internal administrative controls,. used in admin- istering federal financial assistance programs to the extent we considered necessary to evaluate the systems as required by generally accepted auditing standards, the standards for financial and compliance audits contained in the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office, the Single Audit Act of 1984, and the provisions of OMB Circular A-128, Audits of State and Local Governments. For the purpose of this report, we have classified the significant internal accounting and administrative controls used in administering federal financial assistance programs in the following categories: Accounting Controls 1. Receipts 2. Purchases/disbursements 3. Cash and investment balances 4. Financial reporting Administrative Controls 1. General requirements -Political activity -Civil rights 2. Specific requirements -Report ing -Special requirements The management of the City of Salina, Kansas, is responsible for establishing and maintaining internal control systems used in administering federal financial assis- tance programs. In fulfilling that responsibility, estimates and judgements by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control systems used in administering federal financial assistance programs are to provide management with reasonable, but not absolute, assurance that, with respect to federal financial assistance programs, resource use is consistent with laws, regulations, and policies; resources are safeguarded against waste, loss, and misuse; and reliable data are obtained, main- tained, and fairly disclosed in reports. -2- Because of inherent limitations in any system of internal accounting and admini- strative controls used in administering federal financial assistance programs, errors or irregularities may nevertheless occur and not be detected. Also, pro- jection of any evaluation of the systems to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. Our study included all of the applicable control categories listed above. During the year ended December 31, 1985, the City of Salina, Kansas, expended substantially all of its total federal financial assistance under major federal financial assis- tance programs. With respect to internal control systems used in administering major federal financial assistance programs, our study and evaluation included considering the types of errors and irregularities that could occur, determining the internal control procedures that should prevent or detect such errors and irregularities, determining whether the necessary procedures are prescribed and are being followed satisfactorily, and evaluating any weaknesses. With respect to the internal control systems used solely in administering the non- major federal financial assistance programs of the City of Salina, Kansas, our study and evaluation was limited to a preliminary review of the systems to obtain an understanding of the control environment and the flow of transactions through the accounting system. Our study and evaluation of the internal control systems used solely in administering the nonmajor federal financial assistance programs of the City of Salina, Kansas, did not extend beyond this preliminary review phase. Our study and evaluation was more limited than would be necessary to express an opinion on the internal control systems used in administering the federal financial assistance programs of the City of Salina, Kansas. Accordingly, we do not express an opinion on the internal control systems used in administering the federal finan- cial assistance programs of the City of Salina, Kansas. Further, we do not express an opinion on the internal control systems used in administering the major federal financial assistance programs of the City of Salina, Kansas. Also, our examination, made in accordance with the standards mentioned above, would not necessarily disclose material weaknesses in the internal control systems used solely in administering nonmajor federal financial assistance programs. However, our study and evaluation and our examination disclosed the following con- ditions that we believe result in more than a relatively low risk that errors or irregularities in amounts that would be material to a federal financial assistance program may occur and not be detected within a timely period. Disbursement of funds lacks segregation of duties to the extent that the City Clerk, who approves all invoices for payment, also has control of a key to the machine used for signing checks. A second key to the machine does not appear to be adequately controlled. No independent review of data submitted in Bureau of Census reports is made. One employee in the City Clerk's office totals cash receipt documents and prepares the deposits to the bank. -3- These conditions were considered in determining the nature, timing, and extent of the audit tests to be applied in (1) our examination of the 1985 financial statements and (2) our examination and review of the City's compliance with laws and regulations noncompliance with which we believe could have a material effect on the allowability of program expenditures for each major federal financial assistance program and nonmajor federal financial assistance programs. This report does not affect our accompanying reports on the financial statements and on the City's compliance with laws and regulations. This report is intended solely for the use of the City of Salina, Kansas, the cognizant federal agency, and other applicable federal audit agencies and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report, which, upon acceptance by the City of Salina, Kansas, is a matter of public record. Respectfully submitted, Salina, Kansas June 23, 1986 /í~ ~ (1-- -4- MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO HOME OFFICE: P,O. BOX 1100 SALINA, KANSAS 67402-1100 913-825-1561 AUDITORS' REPORT ON COMPLIANCE To the Mayor and The Board of City Commissioners: We have examined the financial statements of the City of Salina, Kansas, for the year ended December 31, 1985, and have included our report thereon on page 1. Our examination was made in accordance with generally accepted auditing standards; the standards for financial and compliance audits contained in the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office, the Single Audit Act of 1984; and the pro- visions of OMB Circular A-128, Audits of State and Local Governments and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The management of the City of Salina, Kansas, is responsible for the City's com- pliance with laws and regulations. In connection with the examination referred to above, we selected and tested transactions and records from each major federal financial assistance program. The purpose of our testing of transactions and records from those federal financial assistance programs was to obtain reasonable assurance that the City of Salina, Kansas, had, in all material respects, admini- stered major programs in compliance with laws and regulations, including those pertaining to financial reports and claims for advances and reimbursements, non- compliance with which we believe could have a material effect on the allowability of program expenditures. Our testing of transactions and records selected from major federal financial assistance programs disclosed instances of noncompliance with those laws and regulations. All instances of noncompliance that we found and the programs to which they relate are identified in the accompanying schedule of findings. In our opinion, subject to the effect, if any, of the ultimate resolution of those instances of noncompliance referred to in the preceding paragraph, for the year ended December 31, 1985, the City of Salina, Kansas, administered each of its major federal financial assistance programs in compliance, in all material respects, with laws and regulations, including those pertaining to financial reports and claims for advances and reimbursements, noncompliance with which we believe could have a material effect on the allowabi1ity of program expendi- tures. Respectfully submitted, Salina, Kansas June 23, 1986 K~ ~ (1~ -5- CITY OF SALINA Sa 1 ina, Kansas SUMMARY STATEMENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND COMPARISON OF CASH BALANCES WITH ENCUMBRANCES Year Ended December 31, 1985 Fund General Fund Special Revenue Funds Emergency Preparedness Street Machinery Special Gasoline Tax Federal Revenue Sharing Special Highway Improvement Fund Tourism and Convention Promotion Employee Benefit Fund Utility Fund Special Parks and Recreation Special Alcohol Programs Special Liability Fund Fair Housing Assistance Program Heritage Conservation Business Improvement District Debt Service Fund Bond and Interest Capital Projects Fund Construction Fund Enterprise Funds Golf Course Sani ta t ion Pa rking Meters Bicentennial Center Solid Waste Disposal Water and Sewerage Bicentennial Center Data Processing Events Fund (Note 4) Water and Sewerage Principal and Interest Account for Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 Unencumbered Cash Ba lance January 1, 1985 S2,763,398.44 5,469.82 86, 115. 84 154,894.91 18,862.06 43,933.27 83,907.11 142,447.39 91,174.35 69.18 174,909.36 3,019.31 8,702.17 690.40 456,395.58 40,805.45 16,911.81 320,917.49 666.80 89,296.99 105,567.42 563,287.81 8,360.89 28,921.46 540,867.98 Receipts S 8,982,188.13 109,330.04 8,053.76 672,958.30 410,924.47 120,453.92 1,682,047.70 495,274.03 45,382.13 45,382.13 50,091.22 17,850.00 6,500.00 38,612.55 9,896,296.46 1,237,257.10 266,253.60 684,673.28 47,135.95 584,351.58 301,854.41 4,479,546.91 563,085.49 201,428.59 544,092.61 Exhibit A Unencumbered Cash Ba lance Encumbrances Cash Balance Expenditures December 31, 1985 December 31, 1985 December 31, 1985 S 9,135,119.43 S 2,610,467.14'- S 777,412.57 S3, 387,879.71 114,039.03 760.83 4,371.74 5,132.57 24,997.69 69,171.91 69,171.91 725,163.45 102,689.76 30,300.47 132,990.23 396,773.85 33,012.68 3,800.00 36,812.68 43,933.27 141,199.70 63,161.33 13,705.82 76,867.15 1,468,767.43 355,727.66 2,353.61 358,081.27 452,598.24 133,850.14 42,347.90 176,198.04 45,000.00 451. 31 451. 31 45,000.00 382. 13 . 382. 13 34,947.90 190,052.68 3,812.52 193,865.20 18,439.26 2,430.05 2,430.05 5,846.54 9,355.63 9,355.63 31,660.88 7,642.07 605.72 8,247.79 9,986,447.43 366.244.61 / 366,244.61 782,180.00 495,882.55 1,743.50 497,626.05 249,975.84 33,189.57 1,904.24 35,093.81 684,942.63 320,648.14 9,444.03 330,092.17 44,400.45 3,402.30 3,402.30 595,547.83 78,100.74 38,914.32 117,015.06 173,191.33 234,230.50. 5,756.37 239,986.87 4,547,061.51 495,773.21 124,947.85 620,721.06 532;070.88 39,375.50 39,375.50 162,287.93 68,062.12 25,772.24 93,834.36 750,359.16 334,601. 43 334,601.43 -6- CITY OF SALINA Salina, Kansas SUMMARY STATEMENT OF RECEIPTS, EXPENDITURES, AND BALANCES BY FUNDS AND COMPARISON OF CASH BALANCES WITH ENCUMBRANCES Year Ended December 31, 1985 Fund Unencumbered Cash Ba lance January 1, 1985 Water and Sewerage Reserve Accounts for Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 Depreciation and Emergency Replacement Extension and Bond Retirement s 525,744.30 630,807.38 637,096.50 Intragovernmenta1 Fund Central Garage (11,566.75) Trust and Agency Funds Citizenship Trust HUD Community Development Cemetery Endowment Mausoleum Trus t Mausoleum Endowment 12,690.46 29,540.69 76,540.34 490.00 17,575.17 Totals (Memorandum Only) S 7,668,511 . 38 The accompanying notes are an integral part of this financial statement. Receipts s 43,221.48 62,890.87 76,685.46 548,846.20 997.35 10,152.85 6,356.41 49.00 S32,240,223.98 Expenditures $ 543,961.07 15,376.76 490.00 $31,751,779.49 Unencumbered Cash Ba lance December 31, 1985 $ 568,965.78 693,698.25 713,781.96 (6,681. 62) 13,687.81 24,316.78 82,896.75 17,624.17 $8,156,955.87 Encumbrances December 31, 1985 $ 38 , 108. 07 24.59 $1,125,325.56 Exhibit A (Contd.) Cash Balance December 31, 1985 s 568,965.78 693,698.25 713,781.96 31,426.45 13,687.81 24,341.37 82,896.75 17,624.17 $9,282,281.43 -7- CITY OF SALINA Sa 1 ina, Kansas STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 GENERAL FUND Receipts Current tangible tax Vehicle tax Delinquent taxes Local sales tax Bingo gross receipts tax Ci ty liquor tax Local ad valorem tax reduction State shared taxes Auto dealers tax stamps Highway maintenance Licenses, fees and permits Municipal court fines Franchise taxes Rents and concessions Interest from investments Services and sales Ambulance fees Fire protection - Outside city Reimbursement of expenditures Transfers from other funds Total Receipts Expenditures Department City Commiss ion ci ty Manager City Clerk City Attorney Municipal Court ci ty Building Engineering Fire Inspection Park Police Street Human Rela tions Emergency Medical Services Traffic Swimming Pools Administration and Planning Insurance and Contingencies Arts Commission Actual limits $1,553,403.82 301,589.27 22,109.19 3,205,156.28 15,361.97 45,382.13 223,979.78 165,704.39 13,766.36 3,090.00 196,237.30 318,389.20 1,154,384.54 8,055.00 673,199.29 192,982.10 136,710.17 133,238.19 424,449.15 195,000.00 8,982,188.13 310,491.65 74,057.46 188,250.97 50,105.69 59,537.25 122,226.13 143,299.24 1,538,381.19 92,791.78 396,606.08 1,638,065.80 553,122.57 50,612.86 353,981.68 79,649.81 43,502.80 92,894.88 139,574.05 93,191.91 Budget $1,586,399.00 260,000.00 25,500.00 2,950,000.00 15,000.00 45,000.00 226,900.00 172,100.00 12,000.00 3,100.00 232,000.00 330,000.00 1,065,000.00 5,600.00 480,000.00 181,800.00 132,860.00 160,000.00 321,160.00 200,000.00 8,404,419.00 307,060.00 73,690.00 192,010.00 51,570.00 56,620.00 131,520.00 141,530.00 1,596,550.00 104,200.00 397,960.00 1,652,880.00 554,180.00 50,680.00 385,930.00 80,990.00 43,300.00 II 0,150.00 155,200.00 89,970.00 Exhibit B (Over) Under Budget $ 32,995.18 (41,589.27) 3,390.81 (255,156.28) 061.97) 082.13) 2,920.22 6,395.61 (1,766.36) 10.00 35,762.70 1l,610.80 (89,384.54) (2,455.00) (193,199.29) 01,182.10) 0,850.17) 26,761.81 (103,289.15) 5,000.00 (577,769.13) 0,431.65) 067.46) 3,759.03 1,464.31 (2,917.25) 9,293.87 0,769.24) 58,168.81 II ,408. 22 1,353.92 14,814.20 1,057.43 67.14 31,948.32 1,340.19 (202.80) 17,255.12 15,625.95 0,221. 91) -8- CITY OF SALINA Sa 1 ina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 GENERAL FUND (CONTD.) Expenditures (Contd.) Department (Contd.) Cemetery General Improvement Museum F1oodworks Neighborhood Centers Capital Improvements Total Expenditures Budget (Over) Under Budget Actual Receipts Over (Under) Expenditures $ 53,609.82 $ 54,630.00 $ 1,020.18 58,191.38 56,870.00 (1,321. 38) 94,291.66 146,000.00 51,708.34 59,868.97 59,760.00 (108.97) 73,428.75 73,200.00 (228.75) 2,775,385.05 2,990,000.00 214,614.95 9,135,1l9.43 9,556,450.00 421,330.57 " , (152,931.30) 0,152,031.00) (999,099.70) Unencumbered Cash Balance, January 1 2,763,398.44 1,152,031.00 (1,611,367.44) ($2.610.467.14) Unencumbered Cash Balance, December 31 $2.610.467.14 $ EMERGENCY PREPAREDNESS (NOTE 2) Receipts Other apportionments and grants Matching funds from the State of Kansas Reimbursement of expenditures Total Receipts $ 68,556.00 38,047.66 2,726.38 109,330.04 60,404.57 33,723.95 5,065.02 290.00 14,555.49 114,039.03 (4,708.99) 5,469.82 $ 760.83 Expenditures Personal services Contractual services Materials and supplies Sundry expenditures Capital outlay Total Expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 -9- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 STREET MACHINERY (NOTE 2) Receipts Interest from investments Transfers from General Fund Total Receipts Ac tua 1 Budget (Over) Under Budget $ 553.76 7,500.00 8,053.76 Expenditures Capital outlay 24,997.69 Receipts Over (Under) Expenditures (16,943.93) Unencumbered Cash Balance, January 1 86 , 115 . 84 Unencumbered Cash Balance, December 31 $ 69,171.91 SPECIAL GASOLINE TAX Receipts Special gasoline tax $ 672,958.30 S 670,000.00 (S 2,958.30) Expenditures Personal services 63,542.07 68,360.00 4,817.93 Contractual services 398,757.31 400,000.00 1,242.69 Materials and supplies 112,864.07 122,280.00 9,415.93 Transfers to General Fund 150,000.00 150,000.00 Total Expenditures 725,163.45 740,640.00 15,476.55 Receipts Over (Under) Expenditures (52,205.15) 00,640.00) 08,434.85) Unencumbered Cash Ba lance, January 1 154,894.91 154,175.00 (719.91) Unencumbered Cash Balance, December 31 $ 102,689.76 $ 83,535.00 ($ 19,154.76) FEDERAL REVENUE SHARING Receipts Grants from Federal government $ 404,819.00 $ 400,000.00 (S 4,819.00) Interest from investments 6,105.47 6,000.00 (105.47) Total Receipts 410,924.47 406,000.00 (4,924.47) Expendi tures Contractual service 41,648.00 41,600.00 (48.00) Transfers to Bicentennial Center 265,000.00 265,000.00 Capital outlay 90,125.85 99,400.00 9,274.15 Total Expenditures 396,773.85 406,000.00 9,226.15 -10- CITY OF SALINA Sa 1 ina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 FEDERAL REVENUE SHARING (CONTD.) Actual Budget (Over) Under Budget Receipts Over Expenditures $ 14,150.62 $ (S 14,150.62) (18,862.06) ($ 33,012.68) Unencumbered Cash Balance, January 1 18,862.06 Unencumbered Cash Balance, December 31 $ 33,012.68 $ SPECIAL HIGHWAY IMPROVEMENT FUND (NOTE 2) Receipts $ Expenditures Capital outlay 43,933.27 Receipts Over (Under) Expenditures (43,933.27) Unencumbered Cash Balance, January 1 43,933.27 Unencumbered Cash Balance, December 31 $ Receipts Transient guest tax TOURISM AND CONVENTION PROMOTION (NOTE 2) $ 120,453.92 Expenditures Professional serV1ces 141,199.70 Receipts Over (Under) Expenditures (20,745.78) Unencumbered Cash Balance, January 1 83,907.11 Unencumbered Cash Balance, December 31 $ 63,161.33 -ll- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 (Over) Under Actual Budget Budget EMPLOYEE BENEFIT FUND Receipts Current tangible taxes $1,125,757.36 $1,155,299.00 $ 29,541. 64 Delinquent taxes 15,532.53 12,000.00 0,532.53) Interest on investments 15,007.59 15,000.00 (7.59) Employees contributions to Kansas Firemen's and Policemen's Retire- ment Fund 7,258.38 215,500.00 208,241. 62 Social security contributions 16,241. 58 114, 200.00 97,958.42 Employees retirement contributions 18,275.36 228,300.00 210,024.64 Unemployment insurance contributions 396.51 5,600.00 5,203.49 Reimbursement of expenditures 186,104.76 93,400.00 ( 92, 704. 76) Vehic 1e tax 257,473.63 215,800.00 (41,673.63) Trans fers from General Fund 40,000.00 40,000.00 Total Receipts 1,682,047.70 2,095,099.00 413,051.30 Expenditures Public officials and employee liability insurance 32,208.00 9,000.00 (23,208.00) Social security 189,053.45 288,200.00 99,146.55 Police and fire retirement 578,900.30 840,300.00 261,399.70 Employees retirement 114, 079.82 363,800.00 249,720.18 Group insurance 420,899.39 457,600.00 36,700.61 Unemployment insurance 9,406.08 35,000.00 25,593.92 Workman's compensation 99,696.00 102,000.00 2,304.00 Earned leave 24,524.39 40,000.00 15,475.61 Total Expenditures 1,468,767.43 2,135,900.00 667,132.57 Receipts Over (Under) Expenditures 213,280.27 (40,801.00) (254,081. 27) Unencumbered Cash Balance, January 1 142,447.39 40,801.00 (101,646.39) Unencumbered Cash Balance, December 31 $ 355,727.66 $ ($ 355,727.66) UTILITY FUND Receipts Current tangible taxes $ 409,804.24 $ 420,547.00 $ 10,742.76 Delinquent taxes 5,301.15 7,000.00 1,698.85 Interest on investments 2,067.29 2,000.00 (67.29) Vehicle taxes 78,101.35 65,000.00 (13,101.35) Tota 1 Receipts 495,274.03 494,547.00 (727.03) -12- CITY OF SALINA Sa 1 ina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 Actual UTILITY FUND (CONTD.) Expenditures Gas s ervi ce Light and power serV1ce Wa ter service Traffic control signals Street lighting Total Expenditures s 44,693.31 89,738.91 21,105.90 33,387.27 263,672.85 452,598.24 Receipts Over (Under) Expenditures 42,675.79 Unencumbered Cash Balance, January 1 91,174.35 Unencumbered Cash Balance, December 31 $ 133,850.14 SPECIAL PARKS AND RECREATION Receipts City liquor tax $ 45,382.13 Expenditures Transfer to General Fund 45,000.00 Receipts Over (Under) Expenditures 382.13 Unencumbered Cash Balance, January 1 69.18 Unencumbered Cash Balance, December 31 $ 451. 31 SPECIAL ALCOHOL PROGRAMS Receipts City liquor tax $ 45,382. 13 Expenditures Contractual serV1ces 45,000.00 Receipts Over (Under) Expenditures 382.13 Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 $ 382. 13 Budget s 59,000.00 123,000.00 40,000.00 34,500.00 290,000.00 546,500.00 (51,953.00) 51,953.00 $ $ 44,544.00 ($ 45,000.00 (456.00) 456.00 $ $ 44,945.00 ($ 45,000.00 (55.00) 55.00 $ (Over) Under Budget $ 14,306.69 33,261. 09 18,894.10 1,1l2.73 26,327.15 93,901.76 (94,628.79) 09,221.35) ($ 133,850.14) 838.13) (838.13) 386.82 ($ 451.31) 437.13) (437.13) 55.00 ($ 382.13) -13- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 (Over) Under Ac tua 1 Budget Budget SPECIAL LIABILITY FUND Receipts Current tangible taxes $ 33,505.10 $ 34,407.00 $ 901. 90 Delinquent tangible taxes 636.30 500.00 (136.30) Trans fers from other funds 6,640.00 7,000.00 360.00 Vehicle taxes 9,309.82 9,500.00 190.18 Total Receipts 50,091.22 51,407.00 1,315.78 Expenditures Liability insurance 28,154.00 30,000.00 1,846.00 Professional services 6,793.90 20,000.00 13,206.10 Total Expenditures 34,947.90 50,000.00 15,052.10 Receipts Over Expenditures 15,143.32 1,407.00 03,736.32) Unencumbered Cash Balance, January 1 174,909.36 148,593.00 (26,316.36) Unencumbered Cash Balance, December 31 $ 190.052.68 S 150.000.00 ($ 40.052.68) FAIR HOUSING ASSISTANCE PROGRAM (NOTE 2) Receipts Grants from Federal government $ 2,600.00 Reimbursement of expenditures 15,250.00 Total Receipts 17,850.00 Expendi tures Personal services 16,390.80 Contractual services 2,048.46 Total Expenditures 18,439.26 Receipts Over (Under) Expenditures (589.26) Unencumbered Cash Balance, January 1 3,019.31 Unencumbered Cash Balance, December 31 S 2,430.05 -14- CITY OF SALINA Sa lina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 Actual Budget HERITAGE CONSERVATION (NOTE 2) Receipts Grant $ 6,500.00 Expendi tures Personal services 5,555.20 Contractual services 281.69 Materials and supplies 9.65 Total Expenditures 5,846.54 Receipts Over Expenditures 653.46 Unencumbered Cash Balance, January 1 8,702.17 Unencumbered Cash Balance, December 31 $ 9,355.63 (Over) Under Budget BUSINESS IMPROVEMENT DISTRICT Receipts Assessment fees $ 38,612.55 $ 36,000.00 ($ 2,612.55) Expenditures Personal services 23,195.40 22,880.00 015.40) Contractual services 7,411.42 9,700.00 2,288.58 Materials and supplies 689.06 1,600.00 910.94 Sundry expenditures 365.00 300.00 (65.00) Capital outlay 800.00 800.00 Total Expenditures 31,660.88 35,280.00 3,619.12 Receipts over Expenditures 6,951.67 720.00 (6,231.67) Unencumbered Cash Balance, January 1 690.40 (690.40) Unencumbered Cash Balance, December 31 $ 7,642.07 $ 720.00 ($ 6,922.07) BOND AND INTEREST Receipts Current tangible taxes Delinquent tangible taxes Current special assessment taxes Delinquent special assessment taxes Interest from investments $ 692,093.07 $ 12,630.64 632,1l1.47 55,324.84 20,229.21 710,336.00 15,000.00 500,000.00 20,000.00 20,000.00 $ 18,242.93 2,369.36 (132, IlL 47) 05,324.84) (229.21) -15- CITY OF SALINA Sa 1 ina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 BOND AND INTEREST (CONTD.) Receipts (Contd.) Accrued interest on bonds sold Special assessments Transfers from other funds Vehicle taxes Issuance of General Obligation Refunding Bonds, Series 1985 (Note 3) Total Receipts Expenditures (Note 5) General bond principal General bond interest Curb, gutter and paving principal (City share) Curb, gutter and paving principal (Property owner share) Curb, gutter and paving interest (City share) Curb, gutter and paving interest (Property owner share) Fiscal agency commission and postage Estimated interest - Bonds to be issued Transfer to Refunding Escrow Trust Account (Note 3) Bond issuance cost (Note 3) Total Expenditures (Note 5) Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 CONSTRUCTION Receipts Temporary note Other Total Receipts Expenditures Construction and capital outlay FUND (NOTE 2) Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 (Over) Under Actual Budget Budget $ 23, 119 .44 $ 2,000.00 ($ 21 , 119 . 44) 8,722.52 5,000.00 0,722.52) 142,200.00 142,200.00 194,865.27 170,000.00 (24,865.27) 8,115,000.00 (8, 115 ,000.00) 9,896,296.46 1,584,536.00 (8,311,760.46) 536,000.00 662,000.00 126,000.00 310,752.51 306,600.00 (4,152.51) 21,546.71 99,900.00 78,353.29 156,453.38 577 , 100. 00 420,646.62 15,138.86 25,500.00 10,361.14 112,213.21 183,900.00 71,686.79 676.51 1,000.00 323.49 40,000.00 40,000.00 8,536,176.25 (8,536,176.25) 297,490.00 (297,490.00) 9,986,447.43 1,896,000.00 (8,090,447.43) (90,150.97) OIl ,464.00) (221,313.03) 456,395.58 311 ,464.00 (144,931. 58) S 366.244.61 $ ($ 366.244.61) $1,017,000.00 220,257.10 1,237,257.10 782,180.00 455,077.10 40,805.45 $ 495.882.55 -16- CITY OF SALINA Sa 1 ina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 (Over) Under Ac tua 1 Budget Budget GOLF COURSE Receipts Membership and green fees $ 170,980.25 $ 147,000.00 ($ 23,980.25) Cart rental 49,325.40 37,200.00 02,125.40) Ca rt storage 5,830.00 4,500.00 0,330.00) Cart user fees 3,723.00 4,000.00 277 . 00 oil well lease 5,352.16 5,000.00 052.16) Sales 31,042.79 29,700.00 (1,342.79) Tota 1 Receipts 266,253.60 227,400.00 08,853.60) Expenditures Personal services 95,482.37 95,780.00 297.63 Contractual services 41,160.73 36,700.00 (4,460.73) Materials and supplies 52,725.94 46,100.00 (6,625.94) Sundry expenditures 58,971.17 45,700.00 03,271.17) Cap i ta 1 ou t lay 1,635.63 1,890.00 254.37 Total Expenditures 249,975.84 226,170.00 (23,805.84) Receipts Over (Under) Expenditures 16,277.76 1,230.00 05 , 047 . 76) Unencumbered Cash Balance, January 1 16,911.81 10,842.00 (6,069.81) Unencumbered Cash Balance, December 31 S 33,189.57 $ 12,072.00 ($ 21.117.57) SANITATION Receipts Interest from investments $ 1,107.52 S 3,000.00 $ 1,892.48 Miscellaneous sales and services 1,360.72 2,500.00 1,139.28 Service fees 676,055.00 673,920.00 (2,135.00) Reimbursement of expenditures 6,150.04 1,000.00 (5,150.04) Total Receipts 684,673.28 680,420.00 (4,253.28) Expendi tures Personal services 267,320.24 286,520.00 19,199.76 Contractual services 142,377.30 148,220.00 5,842.70 Materials and supplies 85,859.69 86,670.00 810.31 Transfer to Bond and Interest Fund 130,200.00 130,200.00 Capital outlay 59,185.40 58,200.00 (985.40) Total Expenditures 684,942.63 709,810.00 24,867.37 Receipts Over (Under) Expenditures (269.35) (29,390.00Jt (29,120.65) Unencumbered Cash Balance, January 1 320,917.49 257,578.00 (63,339.49) Unencumbered Cash Balance, December 31 $ 320,648.14 S 228,188.00 ($ 92,460.14) -17- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 Actual PARKING METERS Receipts Parking meter receipts Parking meter permits Reimbursement of expenditures Total Receipts $ 921.43 37,214.52 9,000.00 47,135.95 Expenditures Personal services Contractual services Materials and supplies Total Expenditures 33,489.81 5,845.03 5,065.61 44,400.45 Receipts Over (Under) Expenditures 2,735.50 Unencumbered Cash Balance, January 1 666.80 Unencumbered Cash Balance, December 31 s 3.402.30 BICENTENNIAL CENTER Receipts Rent Concessions Reimbursement of expenditures Transfers from Federal Revenue Sharing Fund Total Receipts s 133,426.04 183,888.76 2,036.78 265,000.00 584,351.58 Expendi tures Personal services Contractual services Materials and supplies Sundry expenditures Capital outlay Total Expenditures 289,536.97 200,215.53 39,976.67 61,364.89 4,453.77 595,547.83 Receipts Over (Under) Expenditures 01,196.25) Unencumbered Cash Balance, January 1 89,296.99 Unencumbered Cash Balance, December 31 $ 78,100.74 Budget s 1,500.00 53,200.00 54,700.00 33,320.00 15,100.00 7,490.00 55,910.00 (1,210.00) 1,297.00 s 87.00 (S S 150,000.00 230,000.00 265,000.00 645,000.00 305,000.00 227,300.00 38 , 100. 00 96,000.00 666,400.00 (21,400.00) 36,213.00 $ 14,813.00 (S (Over) Under Budget $ 578.57 15,985.48 (9,000.00) 7,564.05 069.81) 9,254.97 2,424.39 1l,509.55 0,945.50) 630.20 3.315.30) S 16,573.96 46 , IlL 24 (2,036.78) 60,648.42 15,463.03 27,084.47 (1,876.67) 34,635.11 (4,453.77) 70,852.17 00,203.75) (53,083.99) 63,287.74) -18- CITY OF SALINA Sa 1 ina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 (Over) Under Actual Budget Budget SOLID WASTE DISPOSAL Receipts Income from leased land $ 162.61 S 12,000.00 S 1l,837.39 Service fees 301,566.70 240,000.00 (61,566.70) Reimbursement of expenditures 125.10 (125.10) Total Receipts 301,854.41 252,000.00 (49,854.41) Expenditures Personal services 68,730.44 72,580.00 3,849.56 Contractual services 29,102.25 28,330.00 (772.25) Materials and supplies 55,358.64 57,530.00 2,171.36 Sundry expenditures 20,000.00 20,000.00 Total Expenditures 173,191.33 178,440.00 5,248.67 Receipts Over (Under) Expenditures 128,663.08 73,560.00 (55,103.08) Unencumbered Cash Ba lance, January 1 105,567.42 40,929.00 (64,638.42) Unencumbered Cash Ba lance, December 31 S 234.230.50 S 114.489.00 ($ 119.741.50) WATER AND SEWERAGE FUND Receipts Wa ter Sewerage Sanitation fees Tapping and front footage service Service charge - Sanitation department Meter repair and service line revenue Miscellaneous income Sales tax collections Meter deposits Reserve for Extension and Bond Re- tirement Reserve for Depreciation and Emergency Total Receipts Expenditures Wa ter supply Softening and Pumping Distribution treatment S2,827,551.89 $2,924,770.00 S 97,218.11 695,584.13 704,000.00 8,415.87 676,109.60 665,000.00 (11,109.60) 20,280.06 10,000.00 00,280.06) 10,716.82 12,000.00 1,283.18 13,964.98 25,000.00 11,035.02 156,890.52 10,000.00 (146,890.52) 45,563.91 46,000.00 436.09 32,885.00 38,000.00 5, 115. 00 400,000.00 400,000.00 400,000.00 400,000.00 4,479,546.91 5,234,770.00 755,223.09 93,023.45 97,050.00 4,026.55 842,735.36 790,100.00 (52,635.36) 162,658.13 211 ,600. 00 48,941.87 361,403.35 364,200.00 2,796.65 -19- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 (Over) Under Ac tua 1 Budget Budget WATER AND SEWERAGE FUND (CONTD.) Expenditures (Contd.) Customer accounting and collection S 305,470.14 S 318,400.00 $ 12,929.86 Administrative and general 629, 736.09 680,610.00 50,873.91 Sewage treatment and collection 588,427.98 614,500.00 26,072.02 Bond ordinance requirements 535,446.19 407,850.00 027,596.19) Transfer to Sanitation Department Service fees 676,055.00 665,000.00 01 , 055 . 00) Capital expenditures 268,921.91 400,000.00 131,078.09 Sa les tax remi tted 45,563.91 40,000.00 (5,563.91) Meter deposits refunded 37,620.00 33,000.00 (4,620.00) Transfer to Reserve for Extension and Bond Retirement 400,000.00 400,000.00 Reserve for Depreciation and Emergency 400,000.00 400,000.00 Total Expenditures 4,547,061.51 5,422,310.00 875,248.49 Receipts Over (Under) Expendi tures (67,514.60) (187,540.00) 020,025.40) Unencumbered Cash Ba lance, January 1 563,287.81 661,975.00 98,687.19 Unencumbered Cash Balance, December 31 $ 495,773.21 S 474.435.00 ($ 21. 338.21) BICENTENNIAL CENTER EVENTS FUND (NOTE 4) Receipts s 563,085.49 Expenditures Transfer of net rental fees to Bicentennial Center Fund Special events expenditures Total Expenditures 40,000.00 492,070.88 532,070.88 Receipts Over Expenditures 31,014.61 Unencumbered Cash Balance, January 1 8,360.89 Unencumbered Cash Balance, December 31 s 39,375.50 -20- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 DATA PROCESSING Receipts Sale of commodities Fees Computer programm1ng serVice Total Receipts Expenditures Personal services Contractual services Materials and supplies Total Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 PRINCIPAL AND INTEREST ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM REFUNDING REVENUE BONDS, SERIES OF 1984 (NOTE 2) Receipts Interest from investments Transfers from Water and Sewerage Fund Total Receipts Expenditures Bond principal Bond interest Total Expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 (Over) Under Ac tua 1 Budget Budget S 1,136.09 S 1,000.00 (S 136.09) 194,605.00 162,900.00 01,705.00) 5,687.50 10,000.00 4,312.50 201,428.59 173,900.00 (27,528.59) 62,044.55 65,240.00 3,195.45 95,867.38 101,470.00 5,602.62 4,376.00 5,900.00 1,524.00 162,287.93 172,610.00 10,322.07 39,140.66 1,290.00 07,850.66) 28,921.46 87.00 (28,834.46) S 68,062.12 $ 1,377 . 00 (S 66,685.12) $ 8,646.42 535,446.19 544,092.61 490,000.00 260,359.16 750,359.16 (206,266.55) 540,867.98 $ 334,601.43 -21- CITY OF SALINA Sa 1 ina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 Actua 1 Budget (Over) Under Budget RESERVE ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM REFUNDING REVENUE BONDS, SERIES OF 1984 (NOTE 2) Receipts Interest from investments s 43,221. 48 Expenditures Receipts Over Expenditures 43,221.48 Unencumbered Cash Balance, January 1 525,744.30 Unencumbered Cash Balance, December 31 $ 568,965.78 RESERVE ACCOUNT FOR COMBINED WATER AND SEWAGE SYSTEM DEPRECIATION AND EMERGENCY REPLACEMENT (NOTE 2) Receipts Interest from investments s 62,890.87 Expenditures Receipts Over Expenditures 62,890.87 Unencumbered Cash Balance, January 1 630,807.38 Unencumbered Cash Balance, December 31 s 693,698.25 RESERVE ACCOUNT FOR COMBINED AND SEWAGE SYSTEM EXTENSION BOND RETIREMENT (NOTE 2) Receipts Interest from investments WATER AND $ 76,685.46 Expenditures Receipts Over Expenditures 76,685.46 Unencumbered Cash Balance, January 1 637,096.50 Unencumbered Cash Balance, December 31 s 713,781.96 -22- CITY OF SALINA Salina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 CENTRAL GARAGE (NOTE 2) Receipts Reimbursement of expenditures Expenditures Personal services Contractual services ~futerials and supplies Sundry expenditures Capital outlay Total Expenditures Receipts Over Expenditures Unencumbered Cash Balance (Deficit), Ja nua ry 1 Unencumbered Cash Balance (Deficit), December 31 CITIZENSHIP TRUST (NOTE 2) Receipts Interest from investments Expendi tures Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 HUD COMMUNITY DEVELOPMENT (NOTE 2) Receipts Interest from investments Collection of housing and winteri- zation loans - Principal and interest Miscellaneous Total Receipts Expenditures Personal services Contractual services Materials and supplies Total Expenditures Actua 1 (Over) Under Budget Budget S 548,846.20 98,352.30 49,181. 61 370,937.38 22,718.26 2,771.52 543,961.07 4,885.13 (11,566.75) (S 6,681. 62) s 997.35 997.35 12,690.46 $ 13,687.81 s 412.32 9,479.29 261.24 10,152.85 3,924.45 10,707.37 744.94 15,376.76 -23- CITY OF SALINA Sa 1ina, Kansas Exhibit B (Contd.) STATEMENT OF RECEIPTS, EXPENDITURES, AND CHANGES IN UNENCUMBERED CASH BALANCES COMPARED WITH BUDGET Year Ended December 31, 1985 Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 CEMETERY ENDOWMENT (NOTE 2) Receipts Interest from investments Perpetual care deposits Total Receipts Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 MAUSOLEUM TRUST (NOTE 2) Receipts Expendi tures Sundry expenditures Receipts Over (Under) Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 MAUSOLEUM ENDOWMENT (NOTE 2) Receipts Sale of mausoleum space Expenditures Receipts Over Expenditures Unencumbered Cash Balance, January 1 Unencumbered Cash Balance, December 31 Actua 1 (Over) Under Budget Budget (S 5,223.91) 29,540.69 $ 24,316.78 s 3,884.76 2,471.65 6,356.41 6,356.41 76,540.34 S 82,896.75 $ 490.00 (490.00) 490.00 s s 49.00 49.00 17,575.17 s 17,624.17 The accompanying notes are an integral part of this financial statement. -24- CITY OF SALINA Sa lina, Kansas NOTES TO FINANCIAL STATEMENTS December 31, 1985 1. Summary of Significant Accounting Policies The City maintains its accounting records in accordance with the principles of fund accounting in order to ensure observance of limitations and restric- tions placed on the use of resources available. This is the procedure by which resources are classified for accounting and reporting into funds estab- lished according to their nature and purposes. The City of Salina maintains its accounting records for all funds on the cash basis, except that expenditures incurred but not paid and purchase commitments at December 31 are recorded as encumbrances at that date. This lnethod serves to develop information relative to compliance with the budget, cash basis, and other statutes applicable to municipalities within the State of Kansas. The method is not, however, in accordance with generally accepted accounting principles for municipalities. Generally accepted accounting principles require: a. Certain accounts receivable to be recorded in the financial statements. The City does not record these receivables until they are collected in cash. b. Expenditures to be recorded generally on the accrual basis. The City records purchase commitments as encumbrances at year-end, and any loss from loss contingencies is not recorded until the amount of the loss is payable. c. The General Fixed Assets and the General Long-Term Debt Account Groups to be maintained. The City does not maintain these account groups. d. Transfers between funds to be recorded as reductions to fund balance of the fund making the transfers and as additions to fund balance of the fund receiving the transfer. The City records such transfers as expenditures of the fund making the transfer and as receipts of the fund receiving the transfer. e. The annual financial statements to include a combined balance sheet for all fund types and account groups; a combined statement of revenues, expenditures, and changes in fund balance for all governmental fund types and expendable trust funds; and a combined statement of revenues, expendi- tures, and changes in fund balance and combined comparison with budget for all governmental fund types. These required financial statements are not included in this report. The City has, by charter ordinance, elected to exempt itself from the Kansas statutory requirement to maintain fixed asset records, and has requested the Director of Accounts and Reports to waive the requirements of K.S.A. 75-1120a as related to the preparation of financial statements in conformity with gener- ally accepted accounting principles. -25- 2. Budgets Applicable Kansas statutes require that unless exempted by a specific statute. contain several funds for which budgets omitting certain budget comparisons are budgets be legally adopted for all funds The accompanying financial statements were not prepared. The reasons for described below. Special Revenue Funds - Certain of the special revenue funds are not budgeted since their revenues are designated for a special purpose or the fund represents a clearing account. Capital Projects Fund - The capital projects fund is not budgeted since provision for payment of expenditure is from the issuance of bonds, temporary notes, and special assessments and charges. Water and Sewerage Bond Fund and Reserve Accounts - These funds are not budgeted since receipts and expenditures are in accordance with requirements of applicable bond issues. Central Garage - The fund is an intragovernmental fund whose expenditures are reimbursable by other funds. Trust and Agency Funds - The individual trust and agency funds are not subject to the budget law since the assets do not belong to the City of Salina. 3. Long-Term Obligations a. General Obligation and Special Assessment Bonds The City issued S8,115,000.00 General Obligation Refunding Bonds, Series 1985, (the 1985 Bonds), dated October 15, 1985, for the purpose of re- funding all the City's General Obligation and Special Assessment Bonds outstanding (the Refunded Bonds) in the amount of $9,430,000.00 as of October 15, 1985. Cash and bond proceeds were transferred to a Refunding Escrow Trust Account at a local bank, pursuant to an escrow trust agree- ment dated as of October 15, 1985, to provide the necessary funds for refunding of the Refunded Bonds, as follows: Funds transferred to Refunding Escrow Trust Account Net proceeds of the 1985 bonds Other bond and interest funds $ 7,817 , :)1 0.00 718,666.25 Tota 1 S8,536,176.25 Funds transferred to the Refunding Escrow Trust Account were invested in United States Government obligations, and the investments and: interest earned on such investments will be sufficient to pay all principal and interest on the Refunded Bonds as they become due. The principal amount of $8,805,000.00 of the Refunded Bonds remains outstanding at December 31, 1985. Neither the assets deposited with the escrow agent for the retirement of the Refunded Bonds nor the outstanding Refunded Bonds are reflected in the accompanying financial statements. -26- b. Revenue Bonds The City has outstanding an issue of Combined Water and Sewer System Revenue Bonds, Series of 1961, of which the principal amount of S220,000.00 remains outstanding at December 31, 1985, an issue of Combined Water and Sewer System Revenue Bonds, Series of 197?, of which the principal amount of $2,960,000.00 remains outstanding at December 31, 1985, and an issue of Combined Water and Sewage System Refunding Revenue Bonds, Series of 1978, of which the principal amount of $4,387,000.00 remains outstanding at December 31, 1985. The City has provided for the payment of all principal and interest on the bonds by depositing United States Government obligations to escrow accounts at a local bank pursuant to certain escrow trust agreements. Neither the assets deposited with the escrow agent for retirement of the 1961, 1977, and 1978 bonds nor the outstanding 1961, 1977, and 1978 obligations, are reflected in the accompanying financial statements. The City has established certain reserve accounts pursuant to a bond ordinance authorizing the issuance of Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984, to provide funds for the retirement of the bonds and payment of interest thereon and for making replacements to the system in the event other funds are not available. The gross revenues of the Water and Sewerage Department are pledged to secure payment of the bonds; however, the pledge is subordinate to a similar pledge to secure payment of the 1961, 1977, and 1978 bonds. The amounts required to be maintained in the reserve accounts estab- lished by the bond ordinance authorizing issuance of the 1984 bonds have been provided and the net operating income of the water and sewerage system appears sufficient to meet the requirements of the ordinance. 4. Bicentennial Center Events Fund The Bicentennial Center Events Fund is used as a clearing account for special events when the City acts as the promotor's agent. Receipts from special events are deposited in the fund and related expenses are disbursed from the fund. The City's rental fees from such events are transferred from the fund to the Bicentennial Center Fund. 5. Bonds and Interest Fund Expenditures of the Bond and Interest Fund for the transfer to the Refunding Escrow Trust Account and payment of bond issuance costs in the total amount of 58,115,000.00 were funded by the issuance of the General Obligation Refunding Bonds, Series 1985. Accordingly, expenditures of the Bond and Interest Fund are not in violation of the Kansas budget law (K.S.A. 79-2935) for the year 1985. 6. Capital Projects Fund The Capital Projects Fund is used to account for the purchase or construction of capital facilities, equipment, and public improvements. -27- A summary of the fund's unencumbered cash balance at December 31, 1985 follows: Cash balance (deficit) resulting from Capital projects completed Capital projects in process Special assessments projects Reserves for future capital projects Total S652,503.19 18,839.42 (393,300.59) 217,840.53 $495,882.55 The deficit resulting from special assessments projects will be funded by the issuance of special assessment bonds. 7. Compliance with Kansas Statutes a. A summary of statutory violations related to 1985 follows. Encumbrances of the Central Garage exceed the cash balance of the fund by S6,681.62 as of December 31,1985, which appears to be in violation of the Kansas cash basis law (K.S.A. 10-1113). b. Expenditures of the Golf Course exceeded budgeted expenditures for the year ended December 31, 1985, by $23,805.84, which appears to be a violation of the Kansas budget law (K.S.A. 79-2935). 8. Fund Transfers From Following is a schedule of transfers between funds for the year 1985. To Amount Special Parks and Recreation Special Gasoline Tax General Fund - Street Federal Revenue Sharing Fund General Fund - Contingencies General Fund - Contingencies General Fund - Contingencies Sani ta t ion Water and Sewerage - Administrative and general Water and Sewerage Solid Waste Disposal - Contractual Services Golf Course - Contractual Services Sanitation - Contractual Services Water and Sewerage - Admini- strative and general Bicentennial Center Events Fund Water and Sewerage - Bond Ordinance requirements General Fund General Fund Street Machinery Bicentennial Center Data Processing - Fees Employee Benefit Fund Central Garage Bond and Interest S 45,000.00 150,000.00 7,500.00 265,000.00 47,000.00 40,000.00 7,500.00 130,200.00 Bond and Interest Sanitation - Service Fees 12,000.00 676,055.00 Special Liability Fund Special Liability Fund Spec ia 1 Liability Fund 300.00 1,140.00 700.00 Special Liability Fund Bicentennial Center - Rent 4,500.00 40,000.00 Principal and Interest Account for Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 535,446.19 -28- Supplemental Information Purpose General Obligation Bonds Library City-County building Municipal golf course Municipal golf course Bicentennial Center Park improvements Park improvements Bridge improvements Solid waste Fire equipment Fire equipment Revenue Bonds Wa ter and sewerage Temporary Note Specia 1 Assessment Bonds Special Assessment Bonds Special Assessment Bonds Specia 1 Assessment Bonds Special Assessment Bonds Specia 1 Assessment Bonds Special Assessment Bonds Special Assessment Bonds Specia 1 Assessment Bonds Special Assessment Bonds Special Assessment Bonds Special Assessment Bonds General Obligation Refunding Bonds, Series 1985 Tota Is CITY OF SALINA Sa 1 ina, Kansas SCHEDULE OF INDEBTEDNESS December 31, 1985 Da te of Issue Final Ma turity Date Rate 1l-01-65 11-01-66 12-01-67 10-01-68 4-01-77 12-15-77 6-01- 79 6-01-80 3-01-81 3-01-81 4-01-84 11-01-86 11-01-87 12-01-86 10-01-86 10-01-97 3-01-88 12-01-89 12-01-90 9-01-87 9-01-91 4-01-94 3.25% to 3.375% 3.75% to 5.0% 3.75% to 4.25% 3.75% to 4.25% 4.6% to 5.25% 4.375% to 4.75% 5.375% to 6.0% 5.7% to 6.75% 7.25% to 8.0% 7.5% to 8.0% 7.8% to 8.6% 6-15-84 2-15-94 7.25% to 9.75% 7-08-85 7-01-87 7.0% 1l-01-65 11-01-67 11-01-68 4-01- 70 9- 0 1- 7 5 12-01-77 6-01- 78 6- 0 1- 79 6-01-80 3-01-81 5-01-83 12-01-84 3 1/ 4% 3,,7% to 4.25% 3..9% to 4.5% 5 1/2% to 6% 4 1/ 4% 4.4% to 4.7% 4.7% to 5% 6.0% to 5.4% 5.80% to 5.75% 7.5% to 8.0% 6.5% to 7.5% 8.25% to 9.15% 10-15-85 4-01-96 5.75% to 9.0% Schedule 1 Amount of Outstanding Year Ended December 31, 1985 Outstanding Original Debt Debt Debt Debt Issue January 1, 1985 Issued Retired December 31, 1985 S 675,000.00 S 60,000.00 S S 60,000.00 S 1,100,000.00 165,000.00 165,000.00 75,000.00 12,000.00 12,000.00 75,000.00 12,000.00 12,000.00 6,500,000.00 4,225,000.00 4,225,000.00 250,000.00 100,000.00 100,000.00 250,000.00 125,000.00 125,000.00 250,000.00 150,000.00 150,000.00 900,000.00 330,000.00 330,000.00 280,000.00 210,000.00 210,000.00 425,000.00 425,000.00 425,000.00 10,780,000.00 5,814,000.00 5,814,000.00 2,770,000.00 2,770,000.00 490,000.00 2,280,000.00 1,017,000.00 1,017,000.00 1,017,000.00 265,000.00 20,000.00 20,000.00 155,000.00 20,000.00 20,000.00 58,267.56 13 , 000. 00 13,000.00 79,481. 71 24,000.00 24,000.00 428,000.00 45,000.00 45,000.00 888,000.00 285,000.00 285,000.00 755,000.00 300,000.00 300,000.00 1,286,000.00 650,000.00 650,000.00 1,450,000.00 870,000.00 870,000.00 836,000.00 595,000.00 595,000.00 820,000.00 740,000.00 740,000.00 768,000.00 768,000.00 768,000.00 7,788,749.27 4,330,000.00 4,330,000.00 8,115,000.00 8,115,000.00 8,115,000.00 S30.470.749.27 S12,914,000.00 S9.132.000.00 S10.634,000.00 S 11 .412.000.00 -29- Payable in Year Ended December 31, 1986 1987 1988 1989 1990 Thereafter Totals CITY OF SALINA Sa 1 ina, Kansas SCHEDULE OF INDEBTEDNESS December 31, 1985 General Obligation Refunding Principal Tota 1 Sl,395,000.00 1,270,000.00 1,020,000.00 930,000.00 785,000.00 2,715,000.00 S8,115,000.00 City Share s 842,580.00 767,080.00 616,080.00 561,720.00 474,140.00 1,639,860.00 S4,901,460.00 Property Owner's Sha re s 552,420.00 502,920.00 403,920.00 368,280.00 310,860.00 1,075,140.00 S3,213,540.00 Bonds, Series 1985 Interest Tota 1 s 550,968.06 493,975.00 414,237.50 343,275.00 275,668.75 644,451.25 ~22,575.56 City Share s 332,785.00 298,361.00 250,198.00 207,338.00 166,504.00 389,252.00 Sl,644,438.00 Property Owner's Sha re S 218,183.06 195,614.00 164,039.50 135,937.00 109,164.75 255,199.25 Sl,078,137.56 Schedule 1 (Contd.) Revenue Bonds Principal Interest S 310,000.00 S190,852.50 210,000.00 170,177.50 230,000.00 151,740.00 250,000.00 131,027.50 275,000.00 107,715.00 1,005,000.00 189,850.00 S2,280,000.00 S941,362.50 -30- CITY OF SALINA Sa 1 ina, Kansas COMPOSITION OF ENDING CASH BALANCES December 31, 1985 Cash in Depositories Planters Bank and Trust Company Sa lina, Kansas Na t iona 1 Ba nk of America, Sa 1 ina, Kansas Firs t Na t i ona 1 Bank and Trus t Company, Sa 1 ina, Kansas First Bank and Trus t Co., Sa 1 ina, Kansas Security Savings and Loan Association, Salina, Kansas Cash in Checking Cash in Savings ($ 19 ,642.8 n s 408.59 38,607.47(1) 344,559.02 879.22 30,000.00 Tota 1 Cash in Depositories $20.252.41 $374,559.02 Petty Cash Water and Sewerage Department Bicentennial Center Total Petty Cash Tota 1 (1) Includes Repurchase Agreement balance of S70,000.00 Certificates of Depos it S2,796,000.00 2,878,000.00 1,810,000.00 1,400,000.00 S8.884.000.00 Schedule 2 Total $2,776,357.13 2,878,408.59 2,193,166.49 1,400,879.22 30,000.00 9,278,811.43 2,500.00 970.00 3,470.00 S9,282,281.43 -31- CITY OF SALINA Sa 1 ina, Kansas Schedule 3 COMPARISON OF GROSS CASH BALANCES WITH DEPOSITORY SECURITY December 31, 1985 Gross Cash Balances Cash in checking Cash in savings Certificates of deposit Federal funds Totals Less FDIC or FSLIC coverage Balances Securable by Colla teral Security required (100% ) Security provided by depos itories Amount Undersecured by Statute Planters First National Bank and National Bank Bank and Trust Company of America Trust Company Security Sa vi ngs and Loan Association First Bank and Trust Co. S 716,771.12 S 408.59 $ 5,699.50 $ 1,,622.22 $ 344,559.02 30,000.00 2,796,000.00 2,878,000.00 1,810,000.00 1,400,000.00 70,000.00 3,512,771.12 2,878,408.59 2,230,258.52 1,401,622.22 30,000.00 200,000.00 100,408.59 105,699.50 101,622.22 30,000.00 S3,312,771.12 S2,778,000.00 S2,124,559.02 Sl,300,000.00 S S3,3l2,771.12 S2,778,000.00 S2,124,559.02 Sl,300,000.00 S 4,250,315.19 3,593,577.76 3,139,663.00 2,093,907.00 S S S S -32- CITY OF SALINA Sa 1 ina, Kansas Schedule 4 COMPARISON OF SPECIAL ASSESSMENTS PROJECTS EXPENDITURES TO ~JTHORIZATIONS December 31, 1985 Project Authorization Cumulative Expenditures Project Name Street Improvements - Episcopal Military Institute Street Improvements - Mayfair Addition Street Improvements and Water Line and Sanitary Sewer Extensions Street and Drainage Improvements and Water Line and Sanitary Sewer Extensions $ 401,235.00 251,295.00 S263,966.74 197,542.34 621,715.75 454,704.80 1,317,005.80 619,033.06 -33- Program Title Federal Revenue Sharing CITY OF SALINA Salina, Kansas SCHEDULE OF ACTIVE FEDERAL AWARDS Year Ended December 31, 1985 Fair Housing Assistance Program Fair Housing Assistance Program Project Number 16th Entitlement Period Account No. 17-2-085-005 HA-12694 HA-14562 Schedule 5 Amount of Award $404,819 14,850 2,400 -34- AUDITORS' FINDINGS CITY OF SALINA Sa 1ina, Kansas SCHEDULE OF AUDITORS' FINDINGS Year Ended December 31, 1985 Federal Revenue Sharing Findings Compliance Requirement - The government is required to provide certain finan- cial data to the Bureau of Census. These data are to be verified by the auditor. Informa t ion reported on Bureau of Cens us forms did not agree wi th the City's annual financial statements. Material differences for the City's fiscal year ended December 31, 1984, are shown below. Form F-21A (1984) Part I - Revenues Line 2.1. - Other - Solid waste, as reported Add audit adjustment entry to record revenue to solid waste As Adjus ted S 283,383 19,000 S 302,383 S 788,447 224,094 Sl.012.541 Line 5 - Interest Earnings, as reported Add Water and Sewerage System interest and other interest As Adjus ted Part IIA Direct Expenditures by Purpose and Type Line 3 - General municipal buildings, as reported Deduct audit adjustment to record 1983 encumbrance Current Operation Direct Expenditure Including Salaries & Wages Capital Outlay Purchase of Land, Equip- ment, Etc. Construction S225,000 225,000 As Adjus ted S Line 10 - Health (Other than hospital), as reported Add expenditures for cemetery S 46,502 S 4,427 As Adjus ted S46,502 S 4,427 -See Auditors' Report on Compliance- -35- CITY OF SALINA Sa 1 ina, Kansas SCHEDULE OF AUDITORS' FINDINGS (CONTD.) Year Ended December 31, 1985 Federal Revenue Sharing (Contd.) Current Operation Direct Expenditure Including Sa laries & Wages Capita lOut lay Construction Purchase of Land, Equip- ment, Etc. Line 16 - Fire, as reported Add expenditures for a fire truck $ 95,071 425,062 As Adjus ted $520,133 Line 20 - Parks and other recreation, as reported Add various expenditures Deduct expenditures for park bridges recorded twice S455,825 S187,633 136,286 -- 12,900 S592,111 S174,733 S 23,974 9,659 As Adjusted $ 33,633 Line 24.a. - Utilities Water supply system, as reported Add expenditures $ 302,695 As Adjus ted S302,695 Part IV - Cash and Investment Assets at End of Fiscal Year Held In Sinking Funds Held in Bond Funds Held in All Other Funds, Except For Any Employee - Retirement Fund Line 1 - Cash and deposits, as reported Add principal and interest account $9,,127,623 501,093 As Adjus ted ~628, 716 Compliance Requirement - Government is to make the audit report available for public inspection no later than 30 days following its completion and receipt by the government. Audit findings indicate that the notice of availability of the December 31, 1984, audit report was not published. -See Auditors' Report on Compliance- -36- SEPARATE FINANCIAL STATEMENTS WATER AND SEWERAGE DEPARTMENT CITY OF SALINA Sa 1 ina, Kansas WATER AND SEWERAGE DEPARTMENT FINANCIAL STATEMENTS AND AUDITORS' REPORT December 31, 1985 and 1984 KENNEDY AND COE Certified Public Accountants Sa 1ina, Kansas MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS KENNEDY AND CaE CERTIFIED PUBLIC ACCOUNTANTS HOME OFFICE: P.O. BOX 1100 SALINA, KANSAS 67402-1100 913-825'1561 OFFICES IN KANSAS NEBRASKA OKLAHOMA COLORADO To the Mayor and The Board of City Commissioners: We have examined the balance sheets of the Water and Sewerage Department of the City of Salina, Kansas, as of December 31, 1985 and 1984, and the related state- ments of income, contributed capital and retained earnings, and changes in financial position for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered nec- essary in the circumstances. In our opinion, the financial statements referred to above present f.airly the finan- cial position of the Water and Sewerage Department of the City of Salina, Kansas, as of December 31, 1985 and 1984, and the resu1 ts of its opera tions ,and the changes in its financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis. Respectfully submitted, Sa 1 i na, Ka ns a s June 23, 1986 4 P-..t {I Ã-L ~9-~ C.P.A. Certified Public Accountant in charge of and actively engaged on this audit. -37- CITY OF SALINA Sa 1 ina, Kansas WATER AND SEWERAGE DEPARTMENT BALANCE SHEETS Current Assets Cash and investments Accounts receivable, net of doubtful accounts - 1985, Prepaid supplies Total Current Assets ASSETS allowance for S24,854; 1984, S41,316 Restricted Assets System sinking fund Cash and investments Plant reserve fund Cash and investments System reserve fund Cash and investments Total Restricted Assets Property, Plant, and Equipment Land Water plant and equipment Sewerage plant and equipment Furniture and office equipment Construction in progress Less accumulated depreciation Total Property, Plant, and Equipment Other Assets Deferred bond issuance costs, net of amortization Totals December 31, 1985 1984 S 620,721 S 730,737 251,437 129,150 1,001,308 262,705 109,983 1,103,425 334,601 540,868 568,966 525,744 1,407,480 1,267,904 2 , 311 , 047 2,334,516 116,263 116,263 14,920,706 14,585,306 10,070,772 9,968,717 155,934 73,961 113,865 - 303,828 25,377,540 25,048,075 12,690,295 - 12,133,122 12,687,245 - 12,914,953 141,292 158,680 S16,140,892 1;16,511,574 The accompanying notes are an integral part of these financial statements. Current Liabilities Accounts payable Customers' meter deposits Accrued interest payable Long-term obligations due within Total Current Liabilities LIABILITIES one year (Note 2) Long-Term Obligations Revenue bonds due after one year (Note 2) Reserves, Contributed Capital Reserves System sinking fund Plant reserve fund System reserve fund Total Reserves and Retained Earnings Contributed capital and retained earnings (Exhibit C) Total Reserves, Contributed Capital and Retained Earnings Totals Exhibit A December 31, 1985 1984 s 124,458 56,355 76,074 310,000 566,887 1,970,000 334,601 568,966 1,407,480 2, 311 , 047 s 166,906 61,090 129,128 490,000 847,124 2,280,000 540,868 525,744 1,267,904 2,334,516 11 ,292,958 11,049,934 13,604,005 13,384,450 S16,140,892 ;S16,511,574 -38- CITY OF SALINA Salina, Kansas WATER AND SEWERAGE DEPARTMENT STATEMENTS OF INCOME Operating Revenues Wa ter revenue Sewerage revenue Tapping service and frontage charges Meter repair and service line revenue Service charge - Sanitation department Miscellaneous income Total Operating Revenues Operating Expenses Wa ter supply Softening and treatment Pumping Distribution Customers' accounting and collection Administrative and general Sewage treatment and collection Depreciation Total Operating Expenses Operating Income Other Income Interest on investments Miscellaneous Total Other Income Other Expenses Interest on revenue bonds Amortization of deferred bond Loss on retirement of assets Total Other Expenses 1ssuance cos ts Net Income before Extraordinary Item Extraordinary Item Gain on advance refunding of revenue bonds (Note 2) Net Income Exhibit B Year Ended December 31, 1985 1984 S2,812,450 695,584 20,280 13,965 10,717 26,954 3,579,950 93,024 842,735 175,286 342,237 305,470 611,571 588,428 597,084 3,555,835 24, 115 189,743 129,937 319,680 207,306 17,388 12,555 237,249 106,546 S 106,546 The accompanying notes are an integral part of these financial statements. S2,851,556 675,895 21,065 27,441 6,733 10,988 3,593,678 84,774 725,203 206,749 343,330 297,587 586,998 586,974 609,964 3,441,579 152,099 222,304 46,932 269,236 256,326 9,420 40,829 306,575 114,760 426,987 :~ 541,747 -39- CITY OF SALINA Salina, Kansas WATER AND SEWERAGE DEPARTMENT Exhibit C STATEMENTS OF CONTRIBUTED CAPITAL AND RETAINED EARNINGS Additions Net income for the year (Exhibit B) Contributions of property, plant and Transfers from System sinking fund reserve Plant reserve fund Total Additions equipment Year Ended December 31, 1985 1984 $ 11 ,049,934 S 9,689,573 106,546 541,747 113, 009 23,462 751,054 1,312,389 225,551 970,609 2,103,149 Balance, Beginning of Year Deductions Transfers to restricted System sinking fund Plant reserve fund System reserve fund Total Deductions reserves 544,787 43,222 139,576 727,585 576,035 59,301 107,452 742,788 Balance, End of Year $11,292,958 ,Sll, 049,934 The accompanying notes are an integral part of these financial statements. -40- CITY OF SALINA Sa 1 ina, Kansas WATER AND SEWERAGE DEPARTMENT Exhibit D STATEMENTS OF CHANGES IN FINANCIAL POSITION Sources of Working Capital From Operations Net income before extraordinary item (Exhibit B) Charges against net income not affecting working capital Depreciation Amortization of deferred bond issuance costs Loss on dispositions of property, plant, and equipment Working capital provided by operations before extraordinary item Extraordinary item - Gain on advance refunding of revenue bonds Working capital provided by operations Issuance of revenue bonds Decrease in restricted assets Total Sources of Working Capital Applications of Working Capital Refunding of revenue bonds Outstanding revenue bonds refunded Funds transferred from System sinking fund Plant reserve fund Refunding of revenue bonds - Net Decrease in long-term obligations Additions to property, plant, and equipment (net of contributions - 1985, Sl13,009; 1984 - S23,462) Increase in deferred bond issuance costs - Net Increase in restricted assets Total Applications of Working Capital Increase (Decrease) in Working Capital Year Ended December 31, 1985 1984 S106,546 S 114,760 597,084 609,964 17,388 9,420 12,555 40,829 733,573 774,973 426,987 733,573 1,201,960 2,770,000 23,469 757,042 3,971,960 4,388,000 0,172,553 (225,551) 2,989,896 490,000 310,000 268,922 443,732 114,555 602,952 578,922 4,641,135 S178.120 ($ 669.175) -41- CITY OF SALINA Sa 1 ina, Kansas WATER AND SEWERAGE DEPARTMENT Exhibit D (Contd.) STATEMENTS OF CHANGES IN FINANCIAL POSITION Changes in Components of Working Capital Increase (Decrease) in Current Assets Cash and investments Accounts receivable Prepa id s upp 1 i es Total Increase (Decrease) in Current Assets Increase (Decrease) in Current Liabilities Accounts payable Customers' meter deposits Accrued expenses Long-term obligations due within one year Total Increase (Decrease) in Current Liabilities Increase (Decrease) in Working Capital Year Ended December 31, 1985 1984 (SI10,016) (S 160,361) 01,268) 40, 577 19,167 (2,492) 002,11 n (122,276) (S 42,448) S 48,525 (4,735) CI5, 580) (53,054) 24,954 (180,000) 489,000 (280,237) 546,899 S178,120 (S 669,175) The accompanying notes are an integral part of these financial statements. -42- CITY OF SALINA Salina, Kansas WATER AND SEWERAGE DEPARTMENT NOTES TO FINANCIAL STATEMENTS December 31, 1985 and 1984 1. Summary of Significant Accounting Policies a. Fund Accounting: The City maintains its accounting records in accordance with the principles of fund accounting in order to ensure observance of limitations and restrictions placed on the use of resources available. Resources are classified for accounting and reporting into funds established according to their nature and purposes. The Water and Sewerage Department of the City of Salina is a separate fund of the City which is supported by user charges from its customers rather than by tax monies. The Department uses the accrual method of accounting in the preparation of its financial statements. Revenue is recorded as earned and expenses as incurred. b. Deferred Issuance Costs: Deferred issuance costs are amortized to expense over the term of the related revenue bonds. c. Property, Plant, and Equipment and Depreciation: Property, plant, and equipment are stated at cost. Assets acquired prior to 1981 have been adjusted to reflect cost as determined by a firm of professional appraisers. Depreciation is determined using the straight-line method over the estimated useful life of each asset. d. Investments: Investments are stated at cost which approximates market. 2. Long-Term Obligations The City issued S2,770,000 Combined Water and Sewage System Refunding Revenue Bonds, Series of 1984 (the 1984 Bonds), dated June 15, 1984, for the purpose of refunding its Combined Water and Sewage System Refunding Revenue Bonds, Series of 1978 (the 1978 Bonds), in the outstanding amount of S4,388,000 as of June 15, 1984. Cash and investments were transferred to a Refunding Escrow Trust Account at a local bank, pursuant to an escrow trust agreement dated as of June 15, 1984, to provide the necessary funds for the refunding of the 1978 Bonds, as follows: Funds transferred to Refunding Escrow Trust Account from Restricted Assets System sinking fund Plant reserve fund Sl,172,553 225,551 1,398,104 2,601,900 Net proceeds of the 1984 bonds Tota 1 S4,000.004 -43- Funds transferred to the Refunding Escrow Trust Account were invested in United States Government obligations, and the investments and interest earned on such investments will be sufficient to pay all principal and interest on the 1978 Bonds as they become due. The transaction resulted in a gain on advance refunding in the amount of $426,987. The 1984 Bonds mature serially each February 15 through 1994, and bear interest at rates varying from 7 1/4 to 9 3/4 percent per annum. Maturities of the 1984 bonds in subsequent years are as follows: Year Amount 1986 1987 1988 1989 1990 Thereafter 310,000 210,000 230,000 250,000 275,000 1,005,000 Total Bonds Outstanding, December 31, 1985 $2,280,000 The City issued the 1978 Bonds for the purpose of refunding its Combined Water and Sewage System Revenue Bonds of 1961 and 1977. Proceeds of the 1978 Bonds were invested in United States Government obligations deposited with a local bank, pursuant to an escrow trust agreement dated May 1, 1978. Total funds deposited and interest earned on such funds will be sufficient to pay all principal and interest on the 1961 and 1977 bonds as they become due. Neither the assets deposited with the escrow agent nor the outstanding 1961, 1977, and 1978 obligations totaling S7,567,000 are reflected in the accom- panying financial statements as of December 31, 1985. The City has established certain reserve accounts pursuant to the 1984 bond ordinance to provide funds for the retirement of the bonds and payment of interest thereon and for making replacements to the system in the event other funds are not available. The gross revenues of the Department are pledged to secure payment of the bonds; however, the pledge is subordinate to a similar pledge to secure payment of the 1961, 1977, and 1978 bonds. The amounts required to be maintained in the reserve accounts established by the 1984 bond ordinance have been provided and the net operating income of the system for 1985 is sufficient to meet the requirements of the ordinance. 3. Retirement Plan The City participates in the State of Kansas Public Employees' Retirement System which is a defined contribution plan covering substantially all employees. The Department's portion of pension costs, which are funded as accrued, was S52,291 and $41,987, for the years 1985 and 1984, respectively. -44-